What is ICBC?
Unlike other parts of the country, British Columbia offers auto insurance to its provincial drivers through a crown corporation – ICBC (Insurance Corporation of BC).
In the early 1970’s, premiums for auto insurance were rising to unprecedented levels and the left-wing government officials at the time, the New Democrats, decided to do something about it. In 1973, the Insurance Corporation of British Columbia was formed offering both auto and property insurance.
Upon its inception, ICBC became the single provider of auto policies and made it compulsory to purchase directly from the crown corporation. When this happened, BC drivers were ecstatic as the premiums dropped by an average of 67%!!
A picture of an ICBC appointed brokerage office (exterior signage).
The distribution of these new policies started in 1974, and were done through brokerage offices who were designated and appointed by ICBC. These appointed brokers were (and still are) paid commissions on the transactions they complete for the crown. These licenses (called Autoplan), which were originally handed out to existing agencies for a nominal processing fee, have had a moratorium put on them since the 1980’s, and have been known to sell today for seven figures in the secondary market.
A lot of things have happened since the government started this monopoly, and it has experienced many ups and downs in its history. With the insurance company realizing revenues into the billions, it has become heavily scrutinized and criticized for its poor management of funds leading to large premium hikes (which go against why the company was originally created in the first place). The company was forced to sell off its property division to reduce its offering as a monopoly (which formed Canadian Northern Shield). In addition, only a portion of the coverage is compulsory, which gives the driver $200k in liability coverage (and registers the car with plates, etc). Drivers have the option to purchase additional third-party coverage, collision, and comprehensive from other private insurance companies.
Within the past five years, ICBC has made some necessary, albeit small, changes. They have moved to an online renewal system for basic transactions (so that consumers can start to renew themselves), they have eliminated decal stickers on plates, and they have changed coverage to a ‘no-fault’ system which helps cap certain injury claims and manage losses.
Today, in the modern age of ICBC, it’s still very much the same as it was when it was originally formed. So, what do you need to know if your planning on driving in BC? You need to visit an Autoplan office in person and talk to a broker. If you’re coming from another country or province with your car, they will transfer its registration for you and help you insure it. If you’re a local, you can renew an existing policy online, or you can visit a broker to create a new policy for a new purchase.
Have more questions on BC auto and what your options are? Call an Alteri agent today and we can help!